Correlation Between RumbleON and Group 1
Can any of the company-specific risk be diversified away by investing in both RumbleON and Group 1 at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining RumbleON and Group 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RumbleON and Group 1 Automotive, you can compare the effects of market volatilities on RumbleON and Group 1 and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in RumbleON with a short position of Group 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of RumbleON and Group 1.
Diversification Opportunities for RumbleON and Group 1
Weak diversification
The 3 months correlation between RumbleON and Group is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding RumbleON and Group 1 Automotive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Group 1 Automotive and RumbleON is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on RumbleON are associated (or correlated) with Group 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Group 1 Automotive has no effect on the direction of RumbleON i.e., RumbleON and Group 1 go up and down completely randomly.
Pair Corralation between RumbleON and Group 1
Given the investment horizon of 90 days RumbleON is expected to generate 30.78 times less return on investment than Group 1. In addition to that, RumbleON is 2.66 times more volatile than Group 1 Automotive. It trades about 0.0 of its total potential returns per unit of risk. Group 1 Automotive is currently generating about 0.09 per unit of volatility. If you would invest 20,471 in Group 1 Automotive on October 20, 2024 and sell it today you would earn a total of 24,295 from holding Group 1 Automotive or generate 118.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RumbleON vs. Group 1 Automotive
Performance |
| Timeline |
| RumbleON |
| Group 1 Automotive |
RumbleON and Group 1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RumbleON and Group 1
The main advantage of trading using opposite RumbleON and Group 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RumbleON position performs unexpectedly, Group 1 can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Group 1 will offset losses from the drop in Group 1's long position.| RumbleON vs. Group 1 Automotive | RumbleON vs. Penske Automotive Group | RumbleON vs. Lithia Motors | RumbleON vs. AutoNation |
| Group 1 vs. Penske Automotive Group | Group 1 vs. Lithia Motors | Group 1 vs. AutoNation | Group 1 vs. Asbury Automotive Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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